The great drama of American shale production may now be nearing its final act. For years, we have anticipated that the relentless growth in shale output would crest by late 2024 or early 2025, catching many off-guard. In hindsight, even this expectation might have erred on the side of caution. Quietly and without much fanfare, both shale oil and shale gas appear to have passed their zenith several months ago. Recent data from the Energy Information Agency (EIA) reveal that shale crude oil production reached its high-water mark in November 2023, only to slide 2%— roughly 200,000 barrels per day—since then. Likewise, shale dry gas production peaked that same month and has since slipped by 1% or 1 billion cubic feet per day. The trajectory from here, according to our models, looks steeper still.
Our view has been met with no shortage of skepticism. Many of our conversations with clients and industry insiders suggest a broad belief that today’s declines are but a pause, not a prelude to sustained contraction. Optimists contend that higher prices and a deregulatory push will spark a new wave of drilling and fresh production gains. After all, President-elect Trump’s “Three Arrows” energy plan prominently promises a 3-million-barrel-per-day increase in US oil-equivalent production. But we see this optimism as misplaced. The primary forces behind the current downturn are neither policy-related nor purely economic—they are geological and inexorable. Depletion, not market dynamics or regulatory overreach, is the central culprit.
Admittedly, the incoming administration features several well-informed and capable figures in the energy sphere, including Chris Wright and Scott Bessent. Their leadership will undoubtedly foster a favorable climate for drilling activity. Yet, even with their expertise and the administration’s likely zeal for energy development, we remain convinced that these efforts will struggle to offset the entrenched declines now gripping the shale sector. The geology of the shale patch has spoken, and its verdict seems increasingly final.
Our thesis is built upon the enduring insights of the late Dr. M. King Hubbert, whose groundbreaking prediction of the peak in conventional U.S. crude production in 1970 remains a landmark in energy analysis. In this essay, we aim to show how we have adapted Hubbert’s foundational work, augmenting it with the latest advances in artificial intelligence, neural networks, and machine learning to address the complexities of shale production. The implications of our findings are profound. Our edge lies in an uncommon synthesis: the marriage of cutting-edge computational techniques with deep, domain-specific expertise in the energy sector.
Too often, we observe legacy oil and gas analysts tethered to antiquated models, while AI practitioners—adept at the math but unfamiliar with the nuances of resource extraction—arrive at flawed conclusions. Neither approach alone suffices anymore. Our unique combination of skills allows us to reach conclusions that defy conventional wisdom, and we are confident these conclusions will ultimately prove prescient.
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